Emkay Global views on MRO-TEK, Tech Mahindra, Thermax, Jindal Saw

Buy MRO-TEK - Target of Rs 92
Emkay Global Financial Services has maintained its buy rating on MRO-TEK with a target price of Rs 92 in its August 5, 2008 research report. "MRO-Tek Ltd ended the first quarter with 29.6% YoY increase in revenues to Rs 314.4 million on account of about 10% revenue contribution from the company’s own manufactured products. During the quarter, PAT declined by 12.5% YoY and 63.8% QoQ to Rs 19.4 million on account of Rs 11.6 million loss on exchange fluctuation."

"At current market price of Rs 52 , MRO-Tek discounts its FY09E and FY10E EPS by 5.8x and 3.8x respectively and thus available at an attractive valuation. But based on the overall macro scenario and the PE contraction taking place across large cap scrips, we follow a cautious and conservative approach in assigning a PE multiple to the scrip. After taking into account the earning downgrades and PE contraction, we maintain our BUY recommendation on the scrip with downgraded target price of Rs 92 (from Rs 128). At our target price, the scrip discounts FY09E and FY10E EPS by 10.3x and 6.6x respectively," says Emkay Global Financial Services' research report.

Buy Tech Mahindra - Target Rs 990

Emaky research has maintained buy ratng on Tech Mahindra with target price of Rs 990 in its June 11, 2008 report. "We note that post the 20%+ steep correction in Tech M’s stock price over the past 3 weeks , the valuations on stock have become extremely compelling with the stock now trading at 11x FY09 adjusted earnings of Rs 66 and less than 10x FY10 adjusted earnings and hence upgrade our rating on the stock from ‘HOLD’ to ‘BUY’ with a revised target price of Rs 990, based on 13x adjusted FY10E earnings of Rs 76.1. We have also revised our FY09 and FY10 revenue estimates by 5-6% and FY09E arnings by 4.4%. (our earnings estimates based at Rs 41/USD for FY09 and Rs 40/USD for FY10) on account of greater clarity emerging on the revenue front" according to Emkay report.

Buy Thermax - Target Rs 546

Emkay report has maintained buy rating on Thermax with target price of Rs 546 in its June 10, 2008 report. "We have cut our earnings estimates by 10.8% and 15.0% for FY2009E and FY2010E respectively. At the CMP of Rs420, the current valuations are 14.5X FY2009E and 11.8X FY2010E earnings. We believe that, current valuations are factoring investor concerns i.e. (1) low order backlogs (2) lowest visibility in revenues during last 5 years and (3) concerns on operating margins due to fluctuation in raw material prices. Further, the current 1-year forward valuations are closer to (1) valuations at the start of secular uptrend in the Capital & Engineering Sector (FY2003) and (2) the restructuring phase (FY2001) - approximately 13-14X. We believe that, there is very little downside from current levels" according to Emkay report.

Buy Jindal Saw - Target of Rs 941

Emkay Global Financial Services has maintained its buy rating on Jindal Saw with a target price Rs 941 in its August 6, 2008 research report. "In Q2CY08, JSL reported 34.76% growth in the net sales from Indian operations on year on year basis. In Q2CY08, it reported the net turnover of Rs 10.175 billion as against Rs 12.855 billion in Q3FY07 (the comparable quarter which includes Rs 7.55 billion from Indian operation and Rs 5.3 billion from USA operations which has been sold off last year) in the corresponding quarter of last year."

"We have maintained BUY on the scrip with revised target price of Rs 941 based on SOTP valuation method. We have taken conservative approach in assigning the target price on the scrip. The target price includes Rs 145 per share as value of quoted investment (at 50% discount to its market value) and Rs 796 as one year forward DCF value of the pipe business. At our target price, the scrip discounts CY09E EPS of Rs 79 by 11.9x," says Emkay Global Financial Services' research report.